Meritorious Claims Which Result From the Conduct of NASA Functions

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

[NOTICE (99-159)]

14 CFR Parts 1261 and 1267

RIN 2700-AC35

Meritorious Claims Which Result From the Conduct of NASA

Functions

AGENCY: National Aeronautics and Space Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The National Aeronautics and Space Administration (NASA)

proposes to amend its rules regarding the submission and processing of

meritorious claims under section 203 of the National Aeronautics and

Space Act of 1958, as amended. NASA regulations currently discuss the

submission and processing of meritorious, as well as tort, claims by

NASA. This proposal provides separate coverage for meritorious claims

in a new part. The proposal reflects the statutes and requirements

governing these two types of claims, differences in their processing

and settlement by NASA, and differences in their payment.

DATES: Comments must be received on or before February 22, 2000.

ADDRESSES: Send comments to Associate General Counsel (Contracts), Code

GK, National Aeronautics and Space Administration, 300 E Street, SW.,

Washington, DC 20546-0001. Submit electronic comments and other data to

[email protected]. NASA will consider late comments to the extent

practicable.

FOR FURTHER INFORMATION CONTACT: Bernard J. Roan, (202) 358-2072

(voice), (202) 358-4355 (fax), and [email protected] (e-mail).

SUPPLEMENTARY INFORMATION: 42 U.S.C. 2473(c)(13) governs meritorious

claims against NASA for bodily injury, death, or damage to or loss of

real or personal property resulting from the conduct of NASA's

functions. Meritorious claims are those claims that NASA decides, as a

matter of equity or fairness, to pay, but for which the United States

could not be held legally liable to the claimant. 42 U.S.C. 2473(c)(13)

authorizes NASA to consider and pay such meritorious claims in amounts

of $25,000 or less and to consider for payment such meritorious claims

exceeding $25,000. In turn, 31 U.S.C. 3104 requires the Secretary of

the Treasury to certify payment of any claim exceeding $25,000 which

NASA considers meritorious.

NASA regulations at 14 CFR subpart 1261.3 presently govern the

processing of meritorious claims. Subpart 1261.3 discusses tort and

meritorious claims without drawing any significant distinctions between

the two types of claims. Moreover, subpart 1261.3 does not discuss the

relationship between NASA and the Secretary of the Treasury in

processing meritorious claims settled by NASA. Addressing meritorious

claims separately from tort claims helps to clarify the bases NASA

deems acceptable for considering meritorious claims.

The proposed rule creates a new part 1267 of 14 CFR governing

NASA's processing of meritorious claims. The new part 1267 establishes

specific procedures for considering meritorious claims arising from

NASA space launch activities.

The proposed rule applies only to meritorious claims brought by

third parties. The proposed rule does not apply to claims arising from

NASA space launches for which the United States provides its space

launch contractor indemnification against third party claims under

other statutory authority. Moreover, the proposed rule, read in

conjunction with proposed implementing coverage in the NASA supplement

to the Federal Acquisition Regulation, addresses certain insurance

requirements levied on space launch contractors for the payment of

third party claims which might otherwise be filed as meritorious

claims. Finally, the new part 1267 discusses administrative matters,

such as filing and documenting meritorious claims, time limitations,

processing by NASA officials, and final approval by the NASA General

Counsel.

As required by the Regulatory Flexibility Act, NASA certifies that

this proposed rule will not have a significant economic impact on small

business entities.

These regulations do not require additional reporting under the

criteria of the Paperwork Reduction Act of 1980.

As required by the Unfunded Mandates Reform Act, NASA certifies

that this regulation will not compel the expenditure in any 1 year of

$100 million or more by State, local, and tribal governments in the

aggregate, or by the private sector. Therefore, the detailed statement

under section 202 of the Unfunded Mandates Reform Act of 1995 is not

required.

List of Subjects

14 CFR Part 1261

Accidents, Administrative practice and procedure, Claims, Tort

claims.

14 CFR Part 1267

Accidents, Administrative practice and procedure, Claims, Federal

Acquisition Regulations, Government contracts, Government procurement,

Space transportation and exploration, Tort claims.

For the reasons set forth in the preamble, NASA proposes to amend

14 CFR parts 1261 and 1267 as follows:

PART 1261--PROCESSING OF MONETARY CLAIMS (GENERAL)

Subpart 1261.3--Claims Against NASA or Its Employees for Damage to

or Loss of Property or Personal Injury or Death--Accruing on or

After January 18, 1967

1. The authority citation for subpart 1261.3 is revised to read as

follows:

Authority: 28 U.S.C. 2671-2680; and 28 CFR part 14.

2. Remove Sec. 1261.301 paragraphs (b) and (c) and redesignate

paragraph (d) as (b).

3. Remove Sec. 1261.307 paragraph (b) and redesignate paragraph (c)

as (b).

4. Amend Sec. 1261.308 by:

A. Amending paragraph (c) by removing the phrase ``pursuant either

to the Federal Tort Claims Act, or 42 U.S.C. 2473(c)(13)''; and

B. Removing paragraph (d).

5. Amend Sec. 1261.312 paragraph (a) by removing the phrase ``a

Voucher for Payment of Tort Claims (NASA Form 616) if the claim has

been acted upon pursuant to 42 U.S.C. 2473(c)(13), or''.

6. Add part 1267 to read as follows:

PART 1267--MERITORIOUS CLAIMS WHICH RESULT FROM THE CONDUCT OF NASA

FUNCTIONS

Sec.

1267.100 Scope of the part.

1267.101 Authorities.

1267.102 Applicability.

1267.103 Definitions.

1267.104 Claims.

1267.105 Presentation of claims.

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1267.106 Filing and processing third party claims involving launch

service contractors.

1267.107 Evidence and information required from third party

claimants.

1267.108 Time limitations for third party claims.

1267.109 NASA action on a launch service claim.

1267.110 Confidentiality.

Authority: 42 U.S.C. 2473(c)(13); 31 U.S.C. 1304.

Sec. 1267.100 Scope of the part.

This part sets forth the procedures for submitting and processing

claims against the United States for bodily injury, death, or damage to

or loss of real or personal property resulting from the conduct of

certain space launch functions by NASA through launch service

contractors. This part further designates the NASA officials authorized

to act upon these claims.

Sec. 1267.101 Authorities.

42 U.S.C. 2473(c)(13)(A), sec. 203(c)(13)(A) of the National

Aeronautics and Space Act of 1958, as amended, authorizes NASA to

consider, ascertain, adjust, determine, settle, and pay, on behalf of

the United States, any claim made against the United States for $25,000

or less for bodily injury, death, or damage to or loss of real or

personal property resulting from the conduct of NASA's functions as

specified in 42 U.S.C. 2473(a). NASA may settle and pay a claim under

this authority even though the United States could not be held legally

liable to the claimant.

(a) 42 U.S.C. 2473(c)(13)(B) authorizes NASA to consider a claim in

excess of $25,000 which, but for the dollar amount, would otherwise be

covered by 42 U.S.C. 2473(c)(13)(A).

(b) 31 U.S.C. 1304, as amended by Public Law 104-316, appropriates

amounts to pay settlements of meritorious claims, when certified by the

Secretary of the Treasury and in excess of the amount payable from

Agency appropriations under 42 U.S.C. 2473.

Sec. 1267.102 Applicability.

(a) One of NASA's primary functions is launching Government and

Government-sponsored payloads into space. In recognition of this fact,

NASA has determined that launches conducted by NASA through launch

service contractors constitute, for purposes of considering claims

under 42 U.S.C. 2473(c)(13), the conduct of a NASA function.

Accordingly, NASA will include in its contracts for launch services a

clause designating the launch as being the conduct of a NASA function

and agreeing to consider claims resulting from the launch under the

authority of 42 U.S.C. 2473(c)(13) and the procedures prescribed in

this part.

(b) This part does not apply to launches for which the NASA

Administrator has provided indemnification pursuant to Public Law 85-

804, or to launches for which the Department of Transportation has

issued or transferred a license under the Commercial Space Launch Act,

49 U.S.C., Chapter 701.

Sec. 1267.103 Definitions.

(a) Meritorious claims are those claims that NASA decides to pay as

a matter of equity or fairness, but for which the United States could

not be held legally liable to the claimant.

(b) Third party claimant means any person or entity, other than

NASA, the launch service contractor, or the launch service contractor's

subcontractors, at any tier, involved in the performance of launch

services pursuant to a contract with NASA. For purposes of this part,

employees of the Government, employees of the launch service

contractor, and employees of the launch service contractor's

subcontractors come within the definition of third party claimant.

Sec. 1267.104 Claims.

(a) For purposes of this part, a meritorious claim arises as a

demand by a third party claimant against a NASA launch service

contractor for money damages, in a sum certain, for bodily injury,

death, or damage to or loss of real or personal property resulting from

a launch conducted by NASA through that launch service contractor.

(b) NASA will consider a third party claim, originally made against

a launch service contractor, as a claim against the United States for

purposes of 42 U.S.C. 2473(c)(13) if the launch services were provided

pursuant to a contract containing the clause at NASA Federal

Acquisition Regulation Supplement (NFS) 1852.228-XX. Once received and

evaluated, NASA will consider a third party claim that is reasonable in

amount to be meritorious, unless the gross negligence or willful

misconduct of the third party claimant, or any launch service

contractor or subcontractor, caused or was an intervening cause in the

bodily injury, death, or damage to or loss of real or personal property

for which damages are sought.

(c) NASA will forward any meritorious claim that is reasonable in

amount and arose out of the conduct of NASA's space launch function to

the Secretary of the Treasury for certification for payment from the

permanent Judgment Fund pursuant to 31 U.S.C. 1304 and implementing

regulations; provided, the claim exceeds $25,000 and the launch service

contractor has exhausted any insurance coverage required by the

contract.

Sec. 1267.105 Presentation of claims.

(a) For damage to or loss of real or personal property, the owner

of the property or his or her duly authorized agent or legal

representative may present a claim.

(b) For bodily injury, the injured person or his or her duly

authorized agent or legal representative may present a claim.

(c) For wrongful death, the executor or administrator of the

decedent's estate or any other person legally entitled to assert such a

claim in accordance with applicable state law may present a claim.

(d) For any loss wholly compensated by insurance, an insurer with

the rights of a subrogee may present a claim. For any loss partially

compensated by insurance, multiple parties with the rights of subrogees

may present claims individually as their respective interests appear,

or jointly. An insurer that provides insurance required by the NASA

launch service contract may not present a subrogation claim based on

that insurance.

(e) If an agent or legal representative presents a claim, it must

be presented in the name of the claimant. The agent or legal

representative must sign the claim, showing the title or legal capacity

of the person signing, accompanied by evidence of the legal authority

of the agent or representative to present a claim on behalf of the

claimant.

Sec. 1267.106 Filing and processing third party claims involving

launch service contractors.

(a) To come under this part, a third party claim arising out of a

launch conducted by NASA through a launch service contractor must first

be filed with the contractor providing the launch service. If the

identity of the cognizant launch service contractor is not apparent, a

claimant should contact the nearest NASA Center for information.

(b) The cognizant launch service contractor must promptly process

any third party claim received in accordance with the terms of the

contract and this part. As an initial matter, the launch service

contractor must verify that any third party claim for bodily injury,

death, or damage to or loss of real or personal property resulted from

a launch conducted by NASA through the launch service contractor. If

the claim resulted from a launch by NASA

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conducted through the launch service contractor, then the contractor

must settle the matter in a reasonable amount, applying any available

insurance coverage required by the contract.

(c) If the cognizant launch service contractor finds that the

insurance coverage required by the contract has been exhausted, the

claim must be given to the NASA contracting officer. The contracting

officer must consider any remaining liability as a claim against the

United States in accordance with this subpart, the terms of the launch

service contract, the Federal Acquisition Regulation (FAR), and the

NASA FAR Supplement (NFS). As such, the contracting officer must

examine the remaining liability to determine whether the amount claimed

is reasonable. For amounts determined to be unreasonable, the

contracting officer must refer the claim back to the launch service

contractor to conduct further discussions. Ultimately, the contract's

disputes clause prescribes procedures for resolving disagreements, if

necessary. For amounts determined to be reasonable, the contracting

officer must process the claim in accordance with Sec. 1267.109.

Sec. 1267.107 Evidence and information required from third party

claimants.

(a) A third party claimant should, insofar as possible, provide

competent evidence to the launch service contractor to substantiate the

circumstances alleged to have given rise to the claim and the amount

claimed. A third party claimant should obtain supporting statements,

repair bills, one or more estimates for repair, and other data, if

possible. Documentation from disinterested parties should be obtained

whenever possible.

(b) With regard to the amount claimed, a third party claimant must

notify the launch service contractor of, and provide information

concerning, any money or other property received as damages or

compensation, or which the third party claimant may be entitled to

receive from other sources by reason of the claimed bodily injury,

death, or damage to or loss of real or personal property. These other

sources of money, damages, or compensation include, but are not limited

to, other launch service contractors, insurers, employers, and persons

whose conduct may have caused or contributed to the accident or

incident.

(c) A third party claimant must provide an English translation of

any supporting document written in a foreign language.

Sec. 1267.108 Time limitations for third party claims.

(a) Consistent with the time limitation stipulated in 42 U.S.C.

2473(c)(13)(A), to receive consideration in accordance with this part,

a third party claimant must file its claim with the launch service

contractor within 2 years after the occurrence of the accident or

incident out of which the claim arose. If the launch service contractor

receives a third party claim within this time period, but after the

launch service contract has expired, or if the claim is still pending

when the contract expires, the contracting officer will reserve the

matter for resolution during final contract closeout.

(b) A third party claimant has properly filed a claim for purposes

of paragraph (a) of this section, when the cognizant launch service

contractor receives from the claimant, or the claimant's duly

authorized agent or legal representative, a written notification and

description of the incident or accident giving rise to the claim,

accompanied by substantiation of the amount claimed.

Sec. 1267.109 NASA action on a launch service claim.

(a) The contracting officer must investigate any launch service

claim submitted by the launch service contractor. As necessary, the

contracting officer may request any NASA office or other Federal agency

to assist in the investigation.

(b) The contracting officer must evaluate any launch service claim

submitted by a launch service contractor to determine that it is

meritorious and reasonable in amount. As part of this evaluation, the

contracting officer must verify that the amount requested is over and

above any insurance required by the contract and that the launch

service contractor or its insurer has, in fact, paid out an amount to

the third party claimant equal to the amount of any required insurance

coverage.

(c) The NASA General Counsel is NASA's final approving official for

claims arising under 42 U.S.C. 2473, in an amount exceeding $25,000. To

pay this type of claim from the permanent indefinite judgment fund,

however, 31 U.S.C. 1304 requires certification by the Secretary of the

Treasury. Accordingly, to facilitate the processing of claims under

this part, the contracting officer must forward to the NASA General

Counsel the following documentation:

(1) A short and concise statement of the general facts surrounding

the launch service claim as a whole;

(2) Copies of all relevant portions of the launch service contract

file and the claim file; and

(3) The contracting officer's analysis of the launch service claim

and recommendations regarding payment from the permanent indefinite

judgment fund.

(d) The NASA General Counsel must fully evaluate and consider any

launch service claim forwarded in accordance with paragraph (c) of this

section. If the General Counsel deems the claim to be reasonable, the

General Counsel will refer the launch service claim to the Secretary of

the Treasury for certification and payment from the permanent

indefinite judgment fund pursuant to 31 U.S.C. 1304.

Sec. 1267.110 Confidentiality.

Under the process prescribed in this subpart, NASA officials may

gain access to contractor documents and other materials that are

privileged, business sensitive, or confidential. In accordance with 18

U.S.C. 1905, NASA officials may not disclose these materials in any

manner or to any extent not authorized by law and must take appropriate

steps to prevent unauthorized disclosures.

Daniel S. Goldin,

Administrator.

[FR Doc. 99-32591 Filed 12-20-99; 8:45 am]

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